Working Paper Number 70
October 2005
Reforming Development Assistance: Lessons from the UK Experience
By Owen Barder
Abstract
The establishment of the UK Department for International Development in 1997, and
the evolution of the UK’s foreign aid policies, has provoked international interest as a
possible model for other countries to follow.
The UK now combines in a single government department not only the delivery of all
overseas aid, but also responsibility for analyzing the impact on developing countries of
other government policies, such as trade, environment and prevention of conflict. The
department is led by a Cabinet-level minister. It has a remit to articulate the UK’s longterm security, economic and political interests in helping to build a more stable and
prosperous world, and to ensure that this long-term goal is considered alongside the
more immediately pressing concerns of political, security and commercial interests. It
has benefited from a sharp focus on its long-term mission to reduce poverty overseas.
Within a few years, the new Department has established a reputation for itself, and for
the UK Government, as a leader in development thinking and practice.
This paper describes the institutional changes in more detail, and considers how they
came about. It also considers the steps that will be needed to consolidate its early
success.
The Center for Global Development is an independent think tank that works to reduce global poverty
and inequality through rigorous research and active engagement with the policy community. This
Working Paper was made possible in part by funding from the William and Flora Hewlett Foundation.
Use and dissemination of this Working Paper is encouraged, however reproduced copies may not be
used for commercial purposes. Further usage is permitted under the terms of the Creative Commons
License. The views expressed in this paper are those of the author and should not be attributed to the
directors or funders of the Center for Global Development.
www.cgdev.org
1
Reforming Development Assistance
Lessons from the UK Experience
Owen Barder1
Center for Global Development
(obarder@cgdev.org)
Acknowlegements
The author is grateful to Sir Brian Barder, Sally Ethelston, Tony German, John Hicklin,
Ruth Levine, Mark Lowcock, Lawrence Macdonald, Richard Manning, Simon Maxwell,
David Mepham, Todd Moss, Grethe Petersen, Judith Randel and Sir John Vereker for
comments on an earlier draft. The views expressed, and all errors and omissions, are my
own. This paper does not necessarily reflect the views of the Center for Global
Development, or the Department for International Development.
2
1. Introduction
“It is one of the proudest achievements of the Government that we have not merely
introduced the International Development Bill, but have increased aid and development
money as a proportion of our national income. …. I believe that our obligations do not
stop at these shores. Indeed, it is not merely right, but is in our long-term interest to offer
a helping hand out of poverty to the poorest regions of the world.”
Tony Blair, House of Commons, 7 March 2001.2
In 1997, the incoming Labour Government established a new Department for
International Development (DFID), with responsibility for the $6bn aid budget and other
aspects of UK development policy, led by its own Cabinet Minister.3
In the subsequent eight years, the new Department established a reputation for itself, and
for the UK Government, as a leader in development thinking and practice. A 2005 study
for the Canadian Government found that, “Ten years ago, DFID was considered a
middle-of-the-pack development agency. Today it is generally considered to be the best in
the world.”4 DFID was described by The Economist as “a model for other rich
countries.”5 The non-governmental organisation Oxfam described DFID as the “best
bilateral development agency.” More new recruits to the management track of the civil
service now apply to join DFID than to the traditional first choices, the Foreign Office
and Treasury, combined. The overhaul of foreign assistance institutions and policies has
been described by Tony Blair as one of the Labour Government’s proudest achievements,
and may be seen in time as one of its greatest legacies.
This paper summarises the institutional changes and policies that led to the establishment
of the Department for International Development and its reputation as a global leader in
development since 1997. It considers the objectives of policy-makers in establishing the
new structure, the extent to which these have been met, and the challenges in the years
ahead. It draws lessons for other countries considering similar reforms.
2. Development assistance and the colonies 1929-1961
2.1 Before World War II
The British aid program is rooted in colonial history. Until the 1920s, the British
Government took the view that colonial administrations were responsible for maintaining
law and order and that they should meet the costs of administration and such social
services as were provided from any revenues that could be raised locally. Colonies were
not encouraged to look to the UK government for financial or economic aid, and there
were no programs for colonial development. Any aid to colonies was voted by Parliament
annually, and was generally limited to temporary emergencies.
It was not until 1929 that the British Government accepted any legal responsibility for
providing financial assistance to the colonies. The Colonial Development Act of 1929
was intended mainly to reduce unemployment in the United Kingdom by promoting
3
industry and trade.6 It established a Colonial Development Fund which was not to exceed
£1 million (about $70 million in 2004 prices) in any one year to support agriculture and
industry in the colonies and in so doing promote "commerce with or industry in the
United Kingdom.” Funds were allocated by Colonial Development Advisory Committee
after a systematic examination of all schemes and projects put forward by colonial
governments. The Committee generally felt that the Act did not permit aid for social
services, for recurrent expenditure or for projects that would not result in any gains for the
UK.
Between 1935 and 1938 a wave of social unrest rippled across the Colonies. The Colonial
Office became convinced that the rapid succession of disturbances in Trinidad, Barbados,
and Jamaica were the result of low wages, high unemployment and poor housing and
sanitary conditions, and feared similar disturbances in other colonies which had similar
problems. It became clear that the restrictions in the Colonial Development Act of 1929
were not sustainable. The result was the Colonial Development and Welfare Act of 1940,
passed in wartime by a coalition government, which increased funds to £5 million a year
(about $300 million in 2004 prices) and extended the purposes of the Colonial
Development Act to include the welfare of the subjects of the colonies.
2.2 Post-war development policy
The post-war Labour Government took the view that the UK Government should play a
substantial role in assisting the development of the colonies. The Colonial Development
and Welfare Act of 1945 replaced the two previous Acts, and increased aid to £120m
(about $6 billion in 2004 prices) over ten years. This longer commitment was intended to
allow colonial governments to plan long-term schemes of public works, social services
and agriculture.7 Each Colonial Government was required to prepare a Ten Year Plan, in
consultation with representatives of the local population. A large proportion of the
money that went into each Ten Year Program was provided out of local revenues and
loans: the British Government sought to minimize the amount funded by aid “so as to
prevent even a suggestion of political pressure from the United Kingdom.” 8
The Overseas Resources Act of 1947 established two Development Corporations, a
Colonial Development Corporation, to operate in the Colonies, and an Overseas Food
Corporation, to function anywhere in the world. The objectives of the Corporations were
to bring about a “speedier and more widespread development of our territories overseas
for the benefit of the Colonial peoples, whose low standard of living can only be raised by
greater use of their natural resources…” The Colonial Development and Welfare Act
and the Overseas Resources Act established the United Kingdom’s first systematic aid
programs to be operated not mainly in the interests of the donor.
3. The evolution of policy 1960-1997
3.1 Changed thinking about the role of aid
After World War II, there was a significant change in thinking about the role of foreign
aid. The success of the European Recovery Program (the Marshall Plan9) generated
optimism that the combination of capital and technical assistance could transform
economies in a very short time.10
4
Though it is popular today, it is worth recalling that it took some time and a considerable
effort by President Truman and his colleagues to secure US public support for the
Marshall Plan. The State Department organized a large-scale and well-funded public
education program, including providing trips to Europe for many members of Congress to
see for themselves the need for U.S.-sponsored reconstruction. In the end, it was
increasing Soviet intransigence and the communist take-over of Czechoslovakia in
February 1948 that eventually persuaded Congress to approve the original Marshall Plan
appropriation.11
The break up of the British, French and other European empires created a number of
poor, independent countries, and it became increasingly unsustainable for them to restrict
development aid only to the remaining colonies. The UK Government declared in 1958
that aid would be extended to former colonies that were members of the Commonwealth,
and some non-Commonwealth countries. The British began to offer a combination of
budgetary grants and technical assistance grants, concessionary loans, and loans under the
Export Guarantee Act. The Colonial Office, which was responsible for managing the
colonies and the process of decolonisation, worked under a guiding principle of the
‘paramountcy of interests of the colonial peoples,’ under which it had a duty to press for
these interests within Government even against Britain’s other interests. Many officials
who joined the Colonial Office were idealistic, supportive of aid and in favor of
multilateral institutions.
As well as increasing support for the idea of foreign aid, the Marshall Plan also led
directly to the establishment of an important international development institution. The
Organisation for European Economic Co-operation (OEEC) had been formed in 1948 by
the recipients of aid from the Marshall Plan, and in 1960 a Development Assistance
Group was established within OEEC as a forum for consultations among aid donors on
assistance to less developed countries. In March 1961, the Development Assistance
Group agreed the Common Aid Effort (see Box 1 below). Later that year, the OEEC
became the Organisation for Economic Co-operation and Development (OECD); its new
emphasis on promoting development was epitomized by the rapid establishment within its
structure of the Development Assistance Committee (DAC), which grew out of the
Development Assistance Group.
The Marshall Plan therefore had a strong influence because it promoted the idea of
economic cooperation and illustrated its possible effectiveness, but also because it left an
important organizational legacy in the DAC. The US Government played an important
leadership role continuously from the Marshall Plan to the establishment of the
Development Assistance Committee, which was chaired by US Ambassadors from its
creation until 1999.
5
Box 1: Resolution of the Common Aid Effort 12
RESOLUTION OF THE COMMON AID EFFORT
(adopted by Development Assistance Group, 29 March 1961, London)
The Development Assistance Group:
Conscious of the aspirations of the less-developed countries to achieve improving
standards of life for their peoples;
Convinced of the need to help the less-developed countries help themselves by
increasing economic, financial and technical assistance and by adapting this
assistance to the requirements of the recipient countries;
Agree to recommend to Members that they should make it their common objective to
secure an expansion of the aggregate volume of resources made available to the less
developed countries and to improve their effectiveness;
Agree that assistance provided on an assured and continuing basis would make the
greatest contribution to sound economic growth in the less-developed countries;
Agree that, while private and public finance extended on commercial terms is
valuable and should be encouraged, the needs of some of the less-developed countries
at the present time are such that the common aid effort should provide for expanded
assistance in the form of grants or loans on favourable terms, including long
maturities where this is justified in order to prevent the burden of external debt from
becoming too heavy;
Agree that they will periodically review together both the amount and the nature of
their contributions to aid programmes, bilateral and multilateral, keeping in mind all
the economic and other factors that may assist or impede each of them in helping to
achieve the common objective;
Agree to recommend that a study should be made of the principles on which
Governments might most equitably determine their respective contributions to the
common aid effort having regard to the circumstances of each country, including its
economic capacity and all other relevant factors;
Agree that the Chairman, assisted by the Secretariat, shall be invited to give
leadership and guidance to the Group in connection with the proposed reviews and
study.
Against this background in the early 1960s, a more coherent aid policy was beginning to
develop within the UK. In 1960, a Treasury White Paper argued that the best way to lift
poorer nations out of poverty was through economic development.13 It argued that the
provision of private capital would be the main catalyst for this but money from the United
Kingdom Exchequer would continue to provide aid. A 1963 White Paper took an
optimistic view of the prospects for developing countries, and described aid as a
transitory concept. It supported aid both as a good in itself, but also because it
encouraged trade.14
6
In 1961 the Conservative Government established the Department for Technical
Cooperation, to consolidate in one place the technical expertise for the colonies that had
been spread across several government departments. The Colonial Office was being
reduced in size as a result of decolonisation, and many of its staff transferred to the
Department for Technical Cooperation, helping to preserve the expertise that had been
acquired during the colonial period.
3.2 The Ministry of Overseas Development 1964-1970
In 1964, the incoming Labour Government kept a manifesto promise to establish a
Ministry of Overseas Development (ODM). The ODM brought together the functions of
the Department of Technical Co-operation and the overseas aid policy functions of the
Foreign, Commonwealth Relations and Colonial Offices and of other government
departments. The intention was that this should develop and execute all aspects of
development policy (not just aid); that it should be separate from the Foreign Office (so
that development policies were not subordinated to other foreign policy interests); and it
was to have a planning staff of economists (at a time when economists were rare within
Government).15 The first three Ministers of Overseas Development were members of the
Cabinet.16
A new White Paper in 1965 made a case for aid based both on moral duty and on the
long-term interest of the United Kingdom.17 Aid was not to be given as a response to
requests from developing countries, but as a result of a joint effort to identify the needs of
recipients. The goal of the new policy was to get the most development effect from aid,
and so the 1965 White Paper shifted policy towards project-tied aid, with financial terms
linked to economic conditions in the recipient country.
The ODM did not live up to the high expectations that had been created. Aid spending
rose only slightly during the Labour Government’s term of office, partly because of
balance of payments and fiscal constraints. From August 1967 the ministerial office was
demoted out of the Cabinet, which greatly reduced its leverage within the Government.
Though the ODM remained a separate government department, it was no longer
represented in Cabinet. The ODM was always an aid ministry rather than a development
ministry – it did not have any impact on trade policy or political relationships with
overseas governments, and even on aid the most important decisions were taken by an
interdepartmental committee. It was not able to define a coherent policy agenda: a further
White Paper in 1967 was largely a progress report, consisting mainly of a detailed
account of the complexities of the British aid program.18
3.3 The Ministry of Overseas Development 1970-1974
Following the re-election of a Conservative Government in October 1970 the Ministry of
Overseas Development was incorporated into the Foreign Office, and renamed the
Overseas Development Administration (ODA). The ODA was overseen by a Minister of
State in the Foreign Office,19 who was accountable to the Foreign Secretary.20
In practice, there was little change as a result of this institutional shift. Though it was now
a section of the Foreign Office, the ODA was relatively self-contained with its own
Minister, and the policies, procedures and staff remained largely intact.
7
3.4 Re-establishment of the Ministry of Overseas Development 1974-1979
When it was returned to office in 1974, the Labour Government announced that there
would once again be a separate Ministry of Overseas Development, with its own minister,
though, as in the period 1967-1970, the minister would not be a member of the Cabinet.
The new Government proposed a significant change in aid policy, set out in the 1975
White Paper, The Changing Emphasis of Britain’s Aid Policies: More Help for the
Poorest. British aid was to be focused on the poorest countries, many of whom had been
hard hit by the rise in oil prices, the food crisis, and a deterioration in their terms of trade.
Aid was to be allocated to have “the most effect in alleviating the worst poverty over the
long term.” The priorities would be:
“(a) to give an increasing emphasis in our bilateral aid to the poorest countries,
especially those in the group most seriously affected by the rise in the price of oil
and other commodities;”
“(b) to give special emphasis to programmes oriented towards the poorest groups
within these countries, and especially to rural development;”
“(c) to promote situations in which British concessional aid funds can best serve
to stimulate matching contributions from other governments, and to encourage the
deployment of such aid through both multilateral and bilateral channels towards
the poorest countries.”21
Though the White Paper played down the extent of the change that this entailed, this was
a genuinely new focus on poverty. The White Paper adopted a ‘basic needs’ approach,
identified the rural poor as the main group to be brought out of poverty and committed the
UK to increasing the resources devoted to the agricultural sector. The White Paper also
recognized the importance of international institutions, including a substantial section on
Europe, and it discussed the importance of international trade policy decisions and
investment as well as aid.
Once again, the evolution of the aid program did not live up to the policy aspirations set
out in the White Paper. An important weakness of the 1975 White Paper was that it did
not lift the constraint that UK aid could not, in general, be spent on meeting local costs.
Aid projects often had to be selected not for their development benefits, but because they
could be designed in such a way as to have a high proportion of UK content. For
example, the Indonesia program had to concentrate on groundwater projects because
these were the only identifiable rural development activities that would use UK goods and
services (such as consultants, drilling equipment and pumps.) The problem of local costs
was not solved until exchange controls were abolished in 1979.
From June 1975 the powers of the Minister for Overseas Development were formally
transferred to the Foreign Secretary.22 From December 1976, after the resignation of
Reginald Prentice, the Minister for Overseas Development was no longer a member of the
Cabinet. Though the Overseas Development Ministry remained technically a separate
government department, administratively distinct from the Foreign Office, this meant that
in practice development was not given a separate voice within the government.
8
In 1977, partly to shore up its difficult relations with UK business, the government
introduced the Aid and Trade Provision (ATP). This enabled aid to be linked to nonconcessionary export credits, with both aid and export credits tied to procurement of
British goods and services. Pressure for this provision from UK businesses, and the
Department of Trade and Industry, arose in part because of the introduction of French
mixed credit programs, which had begun to offer French Government support from aid
funds for exports, including for projects in countries to which France had not previously
given substantial aid.23 Though the amounts were initially capped at five percent of aid
spending, the effect of ATP was to bias aid toward higher-income countries and more
capital-intensive projects, and the developmental impact criterion for project approval
was only superficially applied.
During the 1974-1979 Labour Government, the ODA had institutional independence, an
ambitious policy agenda, and high-level political support. There was a reasonably
generous increase in aid resources during this time, from 0.37% to 0.51% of national
income, despite the government’s precarious fiscal position. Yet the department failed to
establish itself firmly within government, could not protect the aid program from being
distorted by commercial objectives, and was unable to influence broader government
policies that impacted on poor countries. To a large extent this was because the
department was not working within a supportive Whitehall environment, and was not able
to create one.24 At the same time, chronic pressure on the balance of payments prevented
the adoption of policies that separated aid from the promotion of UK exports.
3.5 Development policies under the Conservatives 1979-1997
Following the election of the Conservatives under Margaret Thatcher in 1979, the
ministry was transferred back to the Foreign Office, as a functional wing again named
Overseas Development Administration (ODA). The ODA continued to be represented in
Cabinet by the Foreign Secretary while the Minister for Overseas Development, who had
day-to-day responsibility for development matters, held the rank of Minister of State
within the Foreign Office.
New legislation, the Overseas Development and Cooperation Act 1980, changed little,
affirming the Government’s broad powers to use aid funds for a wide variety of purposes.
While the new Government did not publish a new White Paper on overseas development,
there was nonetheless a significant shift in aid policy under the Conservatives. According
to one writer, “Few things so quickly symbolized Mrs. Thatcher’s victory in the 1979
general election as the changes that were soon made to government overseas
development policy and spending.”25 The new Minister for Overseas Development, Neil
Marten, announced in February 1980 that the Government would “give greater weight in the
allocation of our aid to political, industrial and commercial objectives alongside our basic
developmental objectives”.26 The result was a significant expansion of the Aid and Trade
Provision, and a number of bilateral aid projects designed to support British businesses
including steel mills, Leyland buses, Hawker-Siddeley aircraft, and Westland
helicopters.27
The statement also set out the Government’s preference for bilateral aid over assistance
provided through multilateral institutions such as the European Commission. In practice,
9
however, the difficulty of renegotiating international commitments meant that multilateral
contributions were harder to reduce in the short term than bilateral aid. This meant that as
the aid budget fell, the burden of reduction actually fell on the bilateral portion rather than
the multilateral portion, and so aid provided through multilateral institutions actually rose
as a share of a declining total.
The new Government was more candid about its willingness to promote such foreign
policy objectives as maintaining the UK’s leadership role in the Commonwealth and its
permanent seat on the UN Security Council.28 Thus although developmental concerns
were still accorded considerable weight and Conservative ministers responsible for aid
were held in good regard within development circles, there was a real shift of emphasis in
the conduct of development policy.
During the 1980s, the balance of payments gradually lost its political significance, partly
as a result of the abolition of exchange controls in 1979, and partly because of what
became known as the “Lawson Doctrine” that a current account deficit was not a cause
for concern if it was the counterpart of a private sector deficit.29 This reduced the
Government’s macroeconomic interest in using the aid program to promote British
exports. Whereas during the 1980s nearly half the British aid program was restricted to
goods and services originating in the UK, this was gradually reduced in the 1990s and
applied to only about 15% of bilateral aid by 1996.
With the fall in the Berlin Wall and the end of the Cold War, the British Government felt
able to reduce the weight of foreign and economic policy considerations in its aid
allocations, and instead to link aid more directly to democracy and good governance. In
June 1990 the Foreign Secretary, Douglas Hurd, said that: “Economic success depends to
a large degree on effective and honest government, political pluralism and observance of
the rule of law, as well as freer, more open economies." He called on donors to redirect
aid towards better governed countries: “While countries tending towards pluralism,
public accountability, respect for the rule of law, human rights and market principles
should be encouraged, those which persisted with repressive policies, corrupt
management, or with wasteful and discredited economic systems should not expect aid
donors to support their folly with scarce aid resources which could be used better
elsewhere.”30
The pressure to break the link between aid and commercial considerations was further
increased in 1994, by a High Court ruling that there was no legal basis for the
Government to use development funds for primarily commercial purposes. (The Pergau
Dam affair is explained in detail in Appendix 1.) Douglas Hurd wrote afterwards, “the
Pergau episode vexed me greatly at the time. It spoiled what was otherwise a creditable
record which Lynda Chalker with my support had built up on aid.”31
Throughout the whole of its existence, the Overseas Development Administration was
staffed mainly by home civil servants, although some members of the diplomatic service
have spent parts of their careers there. At its peak in 1979, it employed 2,300 staff, which
fell to 1,500 in 1987 as aid budgets were progressively reduced during the Thatcher
administration. The rundown of staff numbers was complemented by a reduction in
overseas manpower. In the mid-1960s there were about 16,000 British staff working on
10
contract to developing countries, receiving a salary supplement from the Overseas
Development Ministry. By 1990, this had been reduced to almost none.
4. The establishment of the UK Department for International
Development (DFID)
4.1 The policy context
Labour had been out of office since 1979, losing four consecutive General Elections.
Tony Blair became Leader of the Opposition in 1994, and set about modernizing the
Labour Party’s image and policies, under the banner of New Labour. He removed the
commitment to public ownership from the party’s constitution. With Gordon Brown, who
would become Finance Minister in the Labour Government, he neutralized the party’s
reputation for “tax-and-spend” by promising to spend no more than the Conservatives’
planned to spend.
Under Tony Blair, New Labour described itself as being committed to a pragmatic,
evidence-based agenda. The 1997 manifesto declared that “New Labour is a party of
ideas and ideals but not of outdated ideology. What counts is what works. The objectives
are radical. The means will be modern.” 32 Labour presented itself as offering an end to
ideological and class politics. Instead, modern policymaking would be driven by research
evidence about what was effective in addressing social problems and achieving intended
outcomes. In key policy areas such as crime, education and welfare, Labour officials
talked about their commitment to finding out ‘what works.’
One feature of the modernizing agenda was “joined-up government.” New Labour had
concluded that seemingly intractable problems such as social exclusion, drug addiction
and crime could not be resolved by any single government department. Instead, such
problems had to be made the object of a concerted attack using all the arms of
government - central and local government and public agencies, as well as the private and
voluntary sectors.33
New Labour had a less well-developed foreign policy agenda (except on relations with
the European Union). It did, however, have a distinctive foreign policy message that it
would bring an end to what it called “sleaze,” as it described a number of connections
between businesses, especially arms exporters, and foreign policy. This line of attack was
boosted by the Pergau Dam case in which aid was linked to commercial contracts in a
way which was subsequently found to be unlawful.34 In February 1996, Sir Richard Scott
published the results of his inquiry into the sale of arms to Saddam Hussein’s government
in Iraq, contrary to the UN sanctions régime then in force. Robin Cook, Labour Foreign
Affairs spokesman, enhanced his parliamentary reputation, and nearly brought down the
Conservative Government, with his charge that the Government had sought to cover up
its involvement in the illegal arm sales.35
For three decades, foreign assistance programs had been influenced by the Cold War,
during which strategic and security interests had affected the governments’ choice of
which countries to support and how; and by the need to support the UK’s balance of
payments, which had encouraged governments to link overseas aid to British exports. By
11
the mid-1990s, these pressures had largely disappeared, creating an opportunity for
Labour to say that it would pursue a foreign policy “with an ethical dimension.”36
4.2 The Labour Party’s policy on development
The publication in 1980 of the Brandt Report had led to renewed thinking about the role
of rich countries in international development. The report argued that aid budgets should
be increased, focused on the poorest countries, and provided through multilateral
institutions; and that poor countries should have more influence over the decisions of
those institutions.37 During the 1980s and 1990s, independent NGOs and consortiums
such as the Independent Group on British Aid argued that British aid should be more
focused on poverty, de-linked from commercial contracts, and part of a broader
government strategy for international poverty reduction.38 The Reality of Aid reports,
published from 1993 onwards, set an agenda for both improving and increasing aid.39
Internationally, a new consensus was forming on development policy. In May 1995,
Development Ministers and Heads of Aid Agencies adopted a statement, Development
Partnerships in the New Global Context, which identified poverty reduction as the central
challenge and endorsed a comprehensive strategy for tackling it.40 Furthermore, they
asked Jim Michel, the American who chaired the Development Assistance Committee, to
produce a forward-looking reflection on “strategies looking to the next century.” The
result was a set of concrete, medium-term goals, all based on the recommendations of
major United Nations conferences, to be pursued on the basis of agreed principles:
people-centred development, local ownership, global integration and international
partnership. These goals were presented in the report Shaping the 21st Century which was
approved by Development Ministers at the DAC High Level Meeting in May 1996.41
The objectives agreed in this report became known first as the International Development
Targets and, after the UN Millennium Summit in September 2000, as the Millennium
Development Goals.42
In 1994-1996, while Labour was in opposition, a Labour Party Policy Commission,
“Britain in the World,” reviewed Labour’s policies on a broad range of international
issues, including foreign policy, security, and development. The Commission, chaired by
Robin Cook, recommended the creation of separate government department responsible
for the broad range of international development issues across government, a focus on the
poorest countries, and giving less weight to commercial and strategic considerations in
overseas aid.
These recommendations were a natural fit with the New Labour agenda of policy-making
based on evidence of what works, and joining-up policy responsibility for difficult
problems across a number of Government departments. They had the political benefit of
illustrating how the conduct of foreign policy would change to reduce the influence of
commercial considerations. They also responded to the agenda for reform of overseas aid
being advocated internationally, by NGOs, academic and others. In practice, the Policy
Commission did not consider the recommendations in detail, and there had been little
discussion of the proposals by the time they were hardened into party policy. The
recommendations passed into the Labour Party policy statement on foreign affairs for the
12
1997 General Election, A Fresh Start for Britain, and in summary form into the
manifesto:
Labour Party 1997 Manifesto commitment
Labour believes that we have a clear moral responsibility to help combat global
poverty. In government we will strengthen and restructure the British aid
programme and bring development issues back into the mainstream of government
decision-making. A Cabinet minister will lead a new department of international
development.
We will shift aid resources towards programmes that help the poorest people in the
poorest countries. We reaffirm the UK's commitment to the 0.7 per cent UN aid
target and in government Labour will start to reverse the decline in UK aid spending.
We will work for greater consistency between the aid, trade, agriculture and
economic reform policies of the EU. We will use our leadership position in the EU to
maintain and enhance the position of the poorest countries during the renegotiation
of the Lomé Convention.
We will support further measures to reduce the debt burden borne by the world's
poorest countries and to ensure that developing countries are given a fair deal in
international trade. It is our aim to rejoin UNESCO. We will consider how this can be
done most effectively and will ensure that the cost is met from savings elsewhere.
In the months before the election in 1997, Foreign Office officials suggested to
Robin Cook and senior Labour Party officials that it would be a mistake to transfer
control of the development budget and policy away from the Foreign Office.43 But at the
same time, Sir John Vereker, the most senior civil servant at the ODA, was in close
contact with Clare Short, the Labour Party Shadow Secretary of State for Overseas
Development; they agreed to argue for the proposed structures and policies of the future
department.44
Immediately following Labour’s victory in the General Election, the new Prime Minister,
Tony Blair, offered the aid portfolio to Clare Short. She was clear that she would not
accept the job unless she was given a Cabinet post with overall responsibility for
development policy generally, and not just aid.45 Ms Short, as Secretary of State for
International Development, was not only a member of the Cabinet, but also a member of
several interdepartmental Ministerial Committees. As the scope of the Department’s
work was expanded to cover development policy she became a member of Government
committees on the environment, drug abuse, women's issues, health, and export credits
including arms sales. One example of the department’s expanded role was that it was
consulted on the approval of arms export license applications before they were issued.
4.3 The main changes to development institutions and policy in 1997
There were three related changes to the structure of UK aid institutions and policy in
1997:
•
An independent ministry, the Department for International Development, was
created, headed by a member of the Cabinet, with responsibility for aid and
13
development. Like its predecessors, the new department had responsibility for
bilateral aid and the funding of multilateral development institutions; but it was
also given responsibility for ensuring a joined-up development policy across the
Government as a whole.
•
Poverty reduction - broadly defined - was identified as the overarching objective
of aid and development policy; and quantifiable and measurable global targets
were identified by which to track progress towards this objective, based on the
International Development Targets (which later became the Millennium
Development Goals).46
•
The concept of development policy coherence was introduced, which
acknowledged that managing aid spending was only one (and arguably not the
most important) part of development policy, and that the new department had a
legitimate voice in the formulation of government policy in other areas (e.g. trade,
conflict and foreign relations) for which other government departments had
primary responsibility.
5. The new policies 1997 – 2005
5.1 White Papers in 1997 and 2000
DFID came into existence at a time of considerable change in international thinking about
development. Market economic reforms in Africa had been necessary, but they had been
painful for the poor and had not always delivered economic growth. While
macroeconomic adjustment continued to be an important part of the policy prescription,
there was a growing focus on poverty reduction, governance reform and debt relief.
Within six months, the new department had drafted a new Government White Paper,
Eliminating Global Poverty, which (as the title suggests) set out an ambitious agenda for
UK development policies. 47
In 2000, the Government published a further White Paper, looking specifically at the
relationship between globalization and development.48 It argued that globalization
provided an opportunity to reduce poverty by making poor people and poor countries
more productive through better access to markets, imported inputs, finance and new
technologies; but that this opportunity would not be realized without supporting actions:
some from rich countries and international organizations, and some within developing
countries.
The main policy goals set by the UK Government in the two White Papers were:
•
Poverty reduction as the goal of development policy, with output targets
The announcement of clear mission for poverty reduction: “We shall refocus our
international development efforts on the elimination of poverty and
encouragement of economic growth which benefits the poor.” The 1997 White
Paper shifted the department’s measure of success from spending targets (e.g.
ODA as a share of national income) to the achievement of the International
Development Targets (which later became the Millennium Development Goals).49
14
•
An explicit focus on social sectors
The 1997 White Paper put special emphasis on investment in social sectors as a
means to poverty reduction; this seemed to shift the emphasis away from
investment in productive sectors such as agriculture and infrastructure (although
in practice this shift was already underway before 1997).
•
Economic growth and liberalization as a means to poverty reduction
The 2000 White Paper proclaimed the importance of economic growth as a means
to reduce poverty. This shifted the balance back a little from the focus on social
sectors following the 1997 White Paper. Coming as it did in the year following
the 1999 Seattle protests, the 2000 White Paper set out the Government’s
commitment to supporting trade liberalization, and to helping poor countries to
benefit from, rather than resist, globalization. 50
•
Development policy not aid policy
The White Papers announced that, in addition to managing the aid program, the
new department would develop capacity to analyze a broad range of policies
affecting development, such as on environment, trade, agriculture, investment,
good government and human rights, conflict prevention, debt relief, financial
stability, drugs, migration, and cultural links.
•
Pursuing long-term poverty reduction rather than short term commercial
interests
The government was clear that the aid program should not be used to pursue short
term commercial interests, as this was thought to be at the expense of the
effectiveness of the development budget. The Aid and Trade Provision program
was abolished in the 1997 White Paper, albeit replaced by the possibility of
continuing to use “mixed credits” which met development criteria but which still
allowed aid to be tied to British contracts. In practice, mixed credits were not
used, and they were formally ended by the 2000 White Paper which announced
that UK aid would be completely untied.
•
New partnerships
The White Papers heralded a new way of working with other UK Government
Departments, other donors and development agencies, developing countries, and
with the private and voluntary sectors. In particular, a new aid relationship
between Britain and the governments of developing countries was envisaged, in
which developing countries which committed themselves to poverty reduction
and good government could in return expect a longer-term commitment from
DFID, more money and greater flexibility in the use of resources. Where
possible, DFID would move away from supporting stand-alone projects and
dictating exactly how resources were to be used: “where we have confidence in
the policies and budgetary allocation process and in the capacity for effective
implementation in the partner government, we will consider moving away from
supporting specific projects to providing resources more strategically in support
of sector-wide programmes or the economy as a whole.”
15
•
A more realistic assessment of Britain’s role in the international system
The White Papers acknowledged that Britain could make only a modest
difference on its own; but that there was much that the international community
could do by working together. This led to a much more positive view of the need
to work closely with other donors. Together with a raft of policy papers on
particular topics, embracing collaboration with others helped DFID to become
extremely influential throughout the development community after 1997.
•
A new view of the role of the state in developing countries
The 1997 White Paper criticized previous models of the role of the developing
country governments as being either too statist, or wrongly believing in a
“minimalist” state. It said: “there is now an opportunity to create a new synthesis
which builds on the role of the state in facilitating economic growth and
benefiting the poor … .. The state is responsible not only for providing the right
economic framework, but also for ensuring social justice: which means access to
services such as health and education and respect for human rights.”
•
Devolution of aid management
The new partnership relationship was supported by increased decentralization of
DFID’s management, in which strong field offices, operating with significant
delegation of authority, would promote dialogue with recipient countries.
The White Papers were important not only because of what they said, but also because
they put on the public record clear statements of the Government’s approach to
international development. This had a considerable impact in an environment in which
there had not been a White Paper for 22 years. Both White Papers were accompanied by a
well organised publicity and communications effort to explain the new policies, both
within the UK and abroad.
5.2 Increased inter-departmental cooperation on conflict
An example of effective joining-up across government, and DFID’s growing role in
development policies and not just aid, was the establishment in 2001 of the Global
Conflict Prevention Pool and the Africa Conflict Prevention Pool.51 The purpose of
these pools was to bring together the resources of the Ministry of Defence, the Foreign
Office and the Department for International Development, to permit a more strategic
approach to conflict reduction. The two pools had a budget of about $300m a year
between them. Each was governed by a cabinet committee of Ministers from the three
departments, chaired by the Foreign Secretary (Global Conflict Prevention Pool) and the
Development Secretary (Africa Conflict Prevention Pool). Each department spent money
allocated to it under its own arrangements for accountability, once the strategy had been
approved by the interdepartmental committee.
Initiatives under the pool arrangements included development of new governance and
justice systems; disarmament, demobilisation and reintegration of fighters into society
and development of alternative livelihoods for them; small arms reduction programs;
training for police, armed forces and other parts of the security sector in democratic and
16
accountable systems which respect human rights. Most of the money was spent on
consultancy and other non-capital support for these objectives.52
In Sierra Leone, for example, the Africa Conflict Prevention Pool coordinated a program
to retrain and re-equip both the army and the police, the creation of a Ministry of Defence
with civilian oversight, funding for an anti-corruption unit, and support for a truth and
reconciliation commission. The pools were especially successful in promoting
coordinated activities in the Balkans, Afghanistan, the Middle East, North Africa, Nepal
and Indonesia.
An evaluation found that the pools promoted significantly better cooperation between the
Departments concerned, especially in London. The expanded pooled funds acted as an
incentive for cooperation. Across the areas of policy, both in country and in Whitehall,
regular formal and informal coordination and information sharing has improved.53
However, a large part of the spending on these objectives of all the participating
departments remained outside the pools.
Following the success of the two pools in improving interdepartmental coordination and
joining up development policy across government, the Government also established an
interdepartmental unit to coordinate work on post-conflict reconstruction, which would
help countries to put in place quickly the civilian capabilities needed for a stable
environment in the aftermath of war, so that reconstruction could begin.
5.3 The International Development Act 2002
In 2002, Parliament passed the International Development Act 2002, foreshadowed in the
2000 White Paper. The Act replaced the Overseas Development and Co-operation Act
1980. It enshrined in law the single purpose of aid spending: every development
assistance project or program must by law either further sustainable development or
promote the welfare of people and be likely to contribute to the reduction of poverty.54
Exceptions were aid to UK Overseas Territories, humanitarian assistance, and
contributions to Multilateral Development Banks. The 2002 Act made it illegal for UK
aid to be tied to the use of British goods and services. It clarified the purposes for which
aid could be given to UK Overseas Territories, gave clearer legal authority for DFID’s
development awareness work, and provided a wider range of mechanisms through which
financial assistance could be provided.
5.4 Better aid allocation to increase value for money
DFID sought to increase value for money by increasing the proportion of its resources
going to very poor countries and by increasing public scrutiny of aid allocation decisions.
The new Department’s focus on helping countries to achieve the Millennium
Development Goals required a greater focus on poor countries because these were
furthest from reaching the goals. Analysis by the economists at World Bank of the
impact of aid on economic growth implied that aid would have more impact if more of it
were spent in countries with large numbers of poor people (as well as in countries with
better governments).55 During the 1990s, however, there had been a significant increase in
the proportion of global aid going to richer countries, away from poorer countries (within
17
a roughly constant total for global aid). DFID decided to address this not only by
changing the allocation of UK aid toward the poorest countries, but also by drawing
attention to the allocation of global aid resources, which were not well targeted to
reaching the Millennium Development Goals. In 1998 DFID set itself an objective of
reversing the trend of EC aid spending, an increasing proportion of which was going to
better off countries.56
In 2002, DFID agreed with the Treasury57 a public target that it would increase the
proportion of DFID’s bilateral program going to low income countries from 78% to
90%.58 This commitment, which demanded a significant shift in resources to the poorest
countries, became known as the “90 – 10 rule.”
In 2003, DFID published a technical analysis which looked at the results of studies of aid
effectiveness to predict where aid spending would have the most impact in terms of lifting
people out of poverty, based on the recipients’ income, population, extent of poverty, and
the quality of governance. 59 This created a publicly available benchmark allocation of aid
spending, optimal in its effect on poverty reduction, from which deviations would have to
be justified.
5.5 Development and security: policy since 9/11
Following the terrorist attacks of September 11, 2001, UK foreign policy increased its
focus on identifying and supporting “weak and failing states” and on removing the
conditions that create the circumstances in which terrorists could recruit and organize.
DFID set out its approach in a policy document in 2005.60 It argued that lack of security
was a significant obstacle to achieving the Millennium Development Goals, and that
poverty and fragile states created fertile conditions for conflict and the emergence of new
security threats including international crime and terrorism.
Under the International Development Act 2002, DFID could not use development
assistance to finance programs whose primary objective was tackling threats to the UK or
global security. The policy document explained the relationship between aid resources
and security: “Nor will DFID open programmes in countries on the basis of UK or global
security considerations alone – there would have to be a prior and compelling poverty
reduction case. But we and other development agencies can support programmes that
enhance the human security of the poor in developing countries and, in so doing, benefit
everyone’s safety, whether rich or poor.”
Under the new strategy, DFID committed itself to pay greater attention to regional
conflict and insecurity; and to countries that were pivotal to regional security; expand
safety, security and access to justice programs; refocus governance work to promote
accountability which promotes security; increase efforts on conflict reduction through the
conflict prevention pools; and encourage transparency of payments for the extraction of
natural resources.
There was considerable pressure within the UK Government to increase DFID spending
on reconstruction in Afghanistan and Iraq. However, the 90-10 rule (see above)
18
prevented allocations to the poorest countries from being reduced in order to
accommodate increases in Iraq (which counted as a middle income country). In order to
increase spending in Iraq without breaching the 90-10 rule, DFID decided to accelerate
planned withdrawal from other middle income countries such as Anguilla, Bulgaria,
Croatia, Honduras, Macedonia, Peru and Romania, and reduce spending in Albania,
Bolivia, China, Jamaica, Kosovo, Russia, South Africa and Sri Lanka.61
5.6 A New Whitehall Environment
Other government departments were predictably nervous at first about the establishment
of a new department with a broad remit. Both the Foreign Office and the Department of
Trade and Industry had in the past been skeptical of the development agenda, and their
policies had reflected lower political priority on Britain’s long-term interest in reducing
poverty in favor of shorter term commercial and political objectives. The Department of
Trade and Industry was distrustful of the establishment of a trade policy department
within DFID; and there were early disagreements with the Ministry of Defence over
military training programs in Africa.62
There was inevitably some friction between the new department and the Foreign Office.
Ms Short wrote afterwards “The Foreign Office wanted us to run projects and not
interfere in political issues such as the ending of conflict in Africa. Africa came low down
the list of Foreign Office priorities but they certainly did not want DFID poking its nose
in.”63 These disagreements mainly took the form of low-intensity bureaucratic warfare on
issues such as the sharing of classified documents, the clearing of drafts of UN Security
Council Resolutions, and policy documents, although there were some important
disagreements, especially relating to the conduct of policy in Africa.64
Relations with the Foreign Office improved over time. In April 2002, a joint Foreign
Office and DFID unit was established to manage the UK's relations with Sudan. In May
2004, this team won an award for best Central Government team in the Public Service
Awards. There was effective collaboration, especially on conflict and post-conflict
reconstruction. In 2004 the two departments agreed an Action Plan for Collaborative
Working mainly on logistical issues, such as sharing services in the UK and overseas; 65
estates issues, especially co-location overseas; security; and IT systems, but also on
country-level collaboration and the joint planning and delivery of shared government
targets.66
The new Department worked closely from the outset with the Treasury. The
independence of the Bank of England in 1997 had liberated senior Treasury officials from
short term worries about the conduct of monetary policy; and they were convinced that
progress towards the reduction of world poverty was in the long-term economic interest
of the UK. At ministerial level, there was an especially good relationship between the
Secretary of State for International Development (Ms Short) and the Finance Minister
(Mr. Brown).
Though relations with the Treasury were generally good, there were some early battles. In
1997, DFID argued that the UK Executive Director of the World Bank should be
appointed by DFID, separately from the UK Executive Director of the IMF. (The two
posts were combined in a single appointment made by the Treasury). A hard-fought
19
compromise was eventually reached: the Secretary of State for International Development
was designated as the UK Governor of the World Bank, in place of the Finance Minister
who would remain Britain’s Governor of the IMF; but the roles of Executive Director of
the World Bank and the IMF were not split and remained a Treasury appointment.67
The new Department was given the task of changing attitudes and policies across
Whitehall, to bring development policy concerns into the mainstream of UK Government
policy-making. This proved easier than had been expected: other Government
departments increasingly saw the need to build support among developing countries and
civil society organizations for their own policies with an international dimension, and
regarded DFID as a potentially useful ally in building international support. In 1999,
following the failure of the WTO Ministerial Meeting in Seattle, Clare Short proposed
that DFID should publish a second White Paper, on the impact of globalisation. Although
this touched on many areas of other departments’ responsibilities, they gave strong
support to the idea, in part because they saw that they could better pursue their policy
priorities if the government built a broader consensus for its approach to international
affairs.
The new Department built a good network of relationships across Whitehall, and
established increasing respect for its effectiveness and for the quality of its thinking.
Especially through the process of developing the 2000 White Paper on Globalisation, it
formed good working relationships with the Department of Trade and Industry, Foreign
Office, Ministry of Defence, and the Department for the Environment, Food and Rural
Affairs. These relationships made a significant contribution to the evolution of policy.
For example, the Department of Trade and Industry championed the designation of the
new trade round, launched in Doha in November 2001, as a Development Agenda. In
July 2004, it published a White Paper, “Making Globalisation a Force for Good,” which
set out a trade policy agenda concentrated on helping the poor.68
6. The aims of the changes and assessment
This section identifies the government’s aims in making its institutional changes, and
discusses whether they have been achieved.
6.1 Focus on the reduction of poverty
The Labour Party decided in opposition that the new Department should have as its single
purpose the reduction, and eventual elimination, of world poverty; and Ms Short
determined in opposition that the immediate objective should be to harness the global
effort to meeting the 2015 targets.
There were two significant motives for insisting on this focus. The first was to improve
value for money: using aid to support British exports or other strategic interests over the
years had reduced the effectiveness of the aid program. The second was managerial: by
setting a single clear mission, Ministers and senior officials could increase the focus and
motivation of staff. Sir John Vereker wrote afterwards, “This clarity of purpose, rapidly
transmitted through the organisation, has been a powerful motivating, unifying and
guiding force over the last five years.”69
20
The government was successful in narrowing the focus of development on the reduction
of poverty, and eschewing the use of aid for commercial or strategic objectives. The
White Papers scaled back and then abolished tied aid; and the International Development
Act 2002 made it illegal for aid to be used for any purpose other than poverty reduction.
However, there was some confusion about the meaning of the focus on poverty reduction.
Some stakeholders, including some of DFID’s own staff, officials from other government
departments and other donor countries, misunderstood it to mean that DFID would be
focused on poverty relief – that is, addressing needs arising from poverty, rather than
tackling the underlying causes. DFID Ministers and senior officials always understood
that long-term, sustainable poverty reduction involved addressing the causes of poverty,
and they interpreted this broadly, to include investing in economic growth, conflict
reduction, improving governance, fighting corruption, and long-term investments such as
R&D and human development. Nonetheless, it was some years before it was widely
understood, including within Whitehall, that the focus on poverty reduction extended
beyond purely humanitarian objectives.
An instructive example of the impact of limiting the department’s resources to poverty
reduction occurred in May 2002, when the Home Office drew up proposals to reduce the
number of asylum seekers in the UK, which was (and remains) a very sensitive political
issue. One proposal was that aid to some developing countries should be made
conditional on accepting the return of asylum seekers. The Prime Minister attached
particular importance to cutting asylum numbers, and Downing Street advisers supported
tying bilateral British and EU development aid for countries such as Somalia, Sri Lanka,
Turkey to commitments to take back rejected asylum seekers.70 Clare Short opposed
using aid funds to “try to blackmail governments into facilitating the early return of
failed asylum seekers.”71 She attended a Cabinet Meeting chaired by the Prime Minister
to consider the proposals, and argued – successfully – that using aid funds in this way
would be a breach of the new act.72 She told the BBC, “In terms of British aid, it is
illegal, because under law we can only spend it for development.”73 The proposal was
dropped.
6.2 A development policy, not just an aid policy
The Government had decided that the new department should not only be responsible for
aid, but that it should also have a role in all the development aspects of UK policy,
including the environment, trade, conflict, political relationships, international economy,
and migration. This had been an aspiration of the first Ministry of Overseas Development
as long ago as 1964.
The motive for including all aspects of development policy in the department’s remit was
the recognition that there were important limits on what aid alone could achieve. A great
many other policies pursued by rich nations have as much, or more, impact on the
reduction of poverty.
Five years later, the then DFID Permanent Secretary wrote of the responsibilities of the
department:
21
As the Accounting Officer for the last eight years of a budget now approaching
£3.5bn [$6bn], and directly responsible to Parliament, I have to say that I spend
surprisingly little of my time transferring resources to developing countries. That’s
the easy bit; but unthinking aid can do more harm than good. Most of the contents
of my in-tray now consist of complex policy issues, spanning different government
departments and involving many different international collaborations designed to
improve the economy and governance of poor countries. These are areas as diverse
as civil-military cooperation in conflict, the developing country voice in
international trade negotiations, the coherence of European Union policies towards
developing countries, the sustainability of debt, the impact of the global
environment on poor people, or the ways of encouraging free and fair election.74
One example of DFID’s expanded role within Government was that it was consulted over
the issue of arms exports licences for sales to developing countries, as were the
Department of Trade and Industry, Foreign Office, the Ministry of Defence. This did not
mean that development interests were always placed above commercial or strategic
decisions. In December 2001, DFID unsuccessfully opposed an arms export application
from British Aerospace for a £28m ($48m) military radar system for Tanzania, on the
grounds that it was unnecessary, and breached the terms of Tanzania’s debt relief.
Following a considerable debate within Government, some of which spilled into the
press, the Prime Minister decided in favor of the Department of Trade and Industry, and
the sale was allowed.
6.3 More aid
One of the incoming Labour Government’s policy commitments was to reverse the
decline in total aid spending, with the aim of moving towards the UN target of 0.7% of
Gross National Income. In practice, since the UN General Assembly agreed in 1970
the aspiration of increasing aid to 0.7% of GDP, 75 successive UK Governments have
committed themselves to move towards this figure without setting a date by which it
would be reached.76 For example, in its February 1974 Manifesto, the Labour Party said:
“the next Labour Government will seek to implement the United Nations Development
Target of 0.7 per cent of GNP in official aid and will increase the aid programme to meet
it.” In the period since 1970, the target acquired considerable political significance as a
measure of the willingness of governments to commit resources to development.
However, the new Government was also committed to maintaining the public expenditure
plans of its predecessor, which constrained its ability to increase aid spending. As a
result, progress was slow in the early years, and in 2001, the DAC peer review of the UK
aid program noted that the Government’s rhetoric had got ahead of reality:77
The government recognises that a more substantial ODA/GNI performance is
necessary to demonstrate the United Kingdom's commitment to tackling world
poverty and has reiterated its commitment to the United Nations' ODA/GNI target
of 0.7%. Although the United Kingdom is one of the few DAC Members committed
to raising its ODA volume and lifting its ODA/GNI ratio, it remains far from
reaching this target.
Partly as a result of commitments given by the EU in advance of the International
Conference on Financing for Development in March 2002, in Monterrey, Mexico, to
22
reverse the decline in aid, the Government budgeted for a more rapid rise in aid from
2002.
In 2004, Hilary Benn as Secretary of State for International Development and Gordon
Brown as Finance Minister agreed future increases in aid at a rate which would reach the
target of 0.7% of GDP by 2013, and budgeted for those increases up to 2007-08.78 As the
chart below shows, this would represent the most sustained increase in aid as a share of
national income for at least 40 years, and it was the first time that any British Government
had set a timetable for meeting the 0.7% target.
Chart 1: ODA as percent of GNI 79
0.70
C
L
C
L
Conservat ive
Labour
0.60
0.50
0.40
0.30
0.20
0.10
19
60
19
63
19
66
19
69
19
72
19
75
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78
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81
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84
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87
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90
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96
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99
20
02
20
05
0.00
6.4 Focus on the UK’s long-term interests
An important motivation for the establishment of a separate department was to increase
the attention paid within Government to the UK’s long-term strategic interests, so that
these might be properly balanced against short term pressures. For example, it was
recognized that it was in the UK’s long-term commercial interests that Africa should
emerge as an economically strong trading partner; and in the UK’s security interests that
there should be reductions in poverty and inequality and improvements in governance in
developing countries. But these long-term interests had not always been given weight
alongside short-term commercial and strategic concerns. By creating a department with a
long-term agenda for global poverty reduction, the intention was to create institutional
pressures within government to ensure that the UK’s long-term interests were taken into
account alongside short-term pressures.
Eight years later, it was apparent that UK policy has been substantially realigned, partly
as a result of the collaborative work across Whitehall of drawing up the two White
Papers. For example, both trade policy and environment policy have changed
significantly to take account of the UK’s long-term interests in shared economic
prosperity and in halting the degradation of the environment.
In 2005, the UK Prime Minister Tony Blair chose two key objectives for the UK
Presidency of the G8: the development of Africa, and the impact of Climate Change.
23
That he chose to focus on these two long-term objectives was a testament to the extent of
the change that had occurred in the priorities and time horizons of UK policy-makers.
6.5 Improve the poverty impact of aid
The reforms of development assistance were intended to improve the poverty impact of
aid, both by improving the allocation of aid – especially by targeting aid on countries with
poor people – and by improving the effectiveness with which it was used.
The government untied aid completely, which was estimated to increase the effectiveness
of aid by between 15 and 30%.80 The government also sought to improve the poverty
impact of aid by shifting resources towards poor countries, with the introduction of the
target that 90% of aid should go to low income countries, and by the use of an explicit aid
allocation model.
By 2003, DFID estimated that the poverty reduction impact of a marginal dollar of aid
had quadrupled since 1990, though some of this was due to changes in aid levels and
improvements in governance in developing countries. As a result of improvements in aid
allocation, DFID’s own estimates showed that it raised more people out of poverty for an
extra $1m than the donor average (it ranked third highest among bilateral donors).81
However, the effectiveness of aid depends not only on where it is used, but also on how it
is spent. Changes in development assistance which were intended to make aid more
effective also had the effect of making it more difficult to measure the cost-effectiveness
of those aid programs. For example, the move away from supporting individual projects
and providing financial support more generally to governments committed to poverty
reduction, and increased collaboration and pooling with other donors, were based on
evidence that aid could be more effective when delivered this way. However, these same
changes also made it more difficult to attribute particular outputs and outcomes to the UK
aid program, so reducing the availability of direct evidence for the effectiveness of aid.
6.6 Focus on the causes of poverty and not just the symptoms
The new department decided to focus on the causes of poverty and not just its symptoms,
in order to take a long-term view of achieving its mission. This brought the new
department explicitly into new policy arenas, such as conflict prevention, trade,
environment, governance and security, with a view to identifying and addressing the
causes of poverty. In one sense, the change was less pronounced than it might appear: the
previous Overseas Development Administration had been engaged in many of these
issues. However, the department’s explicit broad responsibilities for development and
not just aid, and its representation in Cabinet, changed government and public perceptions
of its role, and enabled it to act with considerably greater confidence and effect in these
areas.
An example of the way in which DFID began to look at the causes of poverty was the
strategy of considering Drivers of Change, which sought to ground development
programs in an understanding of the economic, social and political factors that either
drive or block change within a country. 82 The goal of tackling the causes of poverty also
led DFID to expand its work on institution-building and governance reform, security and
24
access to justice and governance programs. DFID and the Department of Trade and
Industry together argued for a “development round” for the Doha trade talks, and for
reform of the EU Common Agricultural Policy. With the Ministry of Defence and
Foreign Office, it greatly expanded work on preventing and ending conflict, and on
investment in post-conflict societies.
6.7 Increasing leverage to increase impact
The Government made a deliberate effort to work with and through other bilateral and
multilateral donors, to leverage the impact of the UK’s contribution to development.
From 1997, DFID consciously moved away from highlighting UK contributions to
particular programs (for example, the Union Flag was no longer stencilled on to bags of
food aid). In part, the intention of this change was that it would give it more
opportunities to work across the international system as a whole, with other like-minded
donors, the European Community and the international financial institutions. Seeking
publicity for the UK’s own contribution internationally, it was felt, had been a distraction
from, and in some cases an obstacle to, effective collaboration with partners. This was
accompanied by an increased effort within the UK to explain the purpose and
effectiveness of the aid program, to sustain support as it became less visible on the
ground.
One example of the effort to increase leverage was the Government’s willingness to
channel resources through multilateral institutions where they are effective, such as
through the World Bank. The UK gave a higher share of aid as multilateral assistance
than the DAC average. Over 1996-2000 DFID provided on average 41% of its aid
through multilateral organizations compared with 36% for all DAC donors and 25% for
the US. (There is no clear relationship between size of donor and the multilateral share.)
An increased willingness to work with others also led to a very large number of policy
collaborations with the World Bank.
In another example, from 2001 DFID’s Vietnam program was established with a
complete ban on purely bilateral aid projects. All aid was provided in support of projects
or programs conducted by or with other development partners, especially the World
Bank. This approach was perceived to leverage other resources, help to focus other
organisations on the achievement of the Millennium Development Goals, discipline
project design by requiring all interventions to secure the support of other agencies, and
reduce transactions costs for the Government of Vietnam.
However, as the chart below shows, although the share of aid going to multilateral
institutions remained relatively high, it fell at a time when the department was advocating
working through multilateral institutions where possible.
25
Chart 2: Multilateral aid as a share of total aid 83
50
45
40
35
30
25
19
75
-7
6
19
77
-7
8
19
79
-8
0
19
81
-8
2
19
83
-8
4
19
85
-8
6
19
87
-8
8
19
89
-9
0
19
91
-9
2
19
93
-9
4
19
95
-9
6
19
97
-9
8
19
99
-0
0
20
01
-0
2
20
03
-0
4
20
percent
6.7 Evidence-based policy making, focusing on outcomes and transparency
In line with a new approach across the UK Government, DFID set itself the task of basing
policy on evidence, focusing on outcomes rather than inputs, and increasing the
transparency of policy making and use of resources. Arguably, it was one of the more
successful government departments at ensuring that policies were firmly based on
evidence.
DFID employed a large number of technical specialists, from economists to
anthropologists, and experts in health, engineering, education, statistics, trade, conflict,
environment, population and governance. One important result of DFID’s commitment
to using evidence was a consistent attention since 1997 to supporting the important, but
politically unglamorous, process of building capacity for the collection and analysis of
statistics in developing countries.
In line with the aim of basing policy on evidence, both White Papers were the result of
extensive consultation with experts outside government, including academics and nongovernmental organizations, and were backed by an array of specially-commissioned
analyses.
The 1997 White Paper shifted the department’s measurement of its performance towards
the UK’s contribution to meeting the Millennium Development Goals, rather than on
input-based measures of the UK’s contribution. However, in common with other
organizations, DFID did not satisfactorily resolve the tension, on the one hand wanting to
increase the importance of measuring outcomes, and on the other hand needing evidence
to attribute those outcomes to the UK’s own contribution. (It was easier to attribute the
26
UK’s contribution to inputs, such as total aid given, or to outputs such as schools built,
than it was to outcomes which are the effect of the country’s own efforts as well as the
combined effects of all the donors.) 84
Development policy became markedly more transparent. Country Assistance Plans –
which formed the basis of DFID country programs – were published for the first time.
Most project documents were made available online through the AIDA database;85 and
from 2005, all project documents were opened to public scrutiny under the UK’s Freedom
of Information Act.
6.9 Greater public awareness and political focus
Finally, it was an explicit aim of the reforms of UK development assistance to increase
the political focus on development, by appointing a high-profile Cabinet Minister to lead
the department.
The 1997 White Paper called for increased public understanding of global mutual
dependence and the need for international development. It called for every child to be
educated about development issues, so that they could understand the key global
considerations that would shape their lives. DFID began a low-key but effective public
awareness campaign. This included, for example, working with the Department for
Education to include “global citizenship” in the new national curriculum, and providing
materials and support for teacher training colleges to enable teachers to incorporate
development into their teaching. In 2004, the UK Government teamed up with the Rough
Guide, publishers of travel books, to produce a Rough Guide to a Fairer World, which
explained what members of the public could do if they wanted to become more involved
in supporting developing countries.86
One effect of these efforts was a steady rise in the proportion of the British public who
said that they were “very concerned” about development, from 17% in 1999 to 26% in
2004.87
Once consequence of the move to greater collaboration with other donors, and greater use
of resource transfer to recipient governments rather than project aid, was that UK aid was
less directly visible, and so less likely to generate a strong sense of ownership in the
United Kingdom. To avoid a decline in support for aid, the Government considered it
important to explain carefully the rationale for the policy change and highlight the
increased impact of British aid that it was expected to bring.
The Labour Government had, at least at first, an unexpectedly testy relationship with
many of the Non Governmental Organizations (NGOs). Clare Short as Secretary of State
for International Development felt that the development and environment NGOs had an
agenda that would not help developing countries to take advantage of globalization, and
that funding British NGOs was a “short term political distraction.” She wrote: “All of
these groups were well intentioned by the most generous possible funding for the best
possible UK NGOs was not capable of bringing about the massive reductions of poverty
that were needed.”88 Relationships with NGOs improved over time, in part because of the
introduction of Partnership Programme Agreements (PPAs) to fund NGOs on the basis of
27
their strategic objectives. PPAs are long-term funding agreements that do not restrict the
use of those funds to particular projects or activities.89
7. Future challenges for DFID
By 2005, enormous progress had been made by the new Department for International
Development, but considerable challenges remained. In the 2005 edition of the Center
for Global Development’s authoritative, quantitative annual study of the how the policies
of rich countries help or hinder poor countries, the United Kingdom ranked about half
way, 10th out of 21 countries, equal to Canada, just below Germany and well behind the
Scandinavian countries and Australia and New Zealand.90 A relatively strong
performance on aid, trade and investment was undermined by weak and deteriorating
performance on policies such as migration and security. (The United Kingdom was,
however, with Spain and Sweden, the joint fastest improver since the index began in
2003.)
The Department for International Development faces a number of continuing challenges,
which will require it to:
•
Maintain a tight focus on the department’s core strengths, and limit the number
of countries to which Britain gives bilateral aid. Prioritization is more difficult at
a time of rapid increases in the aid budget; and arguably one of DFID’s
weaknesses is that it tries to do too much.
•
Lock in the improvements in development policy made following the end of the
Cold War, which enabled aid to be allocated to the poorest countries where it
would have most impact, and reduced the distortion of aid by short-term strategic,
political and commercial interests. Since 9/11 and the increased focus on
security, there will be increasing pressure to use all the Government’s resources in
the fight against terrorism. DFID has, so far, been largely successful in sustaining
the argument that the UK’s longer term interests, including its security interests,
are best served by preserving the focus of aid on poverty reduction.91
•
Restrain, and perhaps reverse, the growth in bilateral aid, by ensuring that the
bulk of the anticipated increases in aid are channeled through multilateral
institutions, which is more efficient both for donors and for recipients; and also by
increasing investments in global and regional public goods, such as scientific
research, early warning systems, and regional infrastructure, which are currently
under-funded.
•
Within bilateral aid, make more progress on implementing DFID’s rhetorical
commitments to increasing program aid, which increases the recipient’s control
of resources, so enhancing effectiveness and accountability, and reduces the
administrative burden of projects.
•
Improve the department’s approach to the transfer of knowledge and skills,
based on evidence about what works; and so reduce the proportion of spending on
technical cooperation and consultants (which, although declining since the late
1990s, remains high by international standards).
28
•
Expand DFID’s influence on sensitive areas of policy which have a significant
effect on poor countries, including migration policies, corruption and lack
transparency by transnational corporations, the configuration of armed forces for
humanitarian relief and conflict prevention.
•
Build stronger public support for the Government’s role in international
development. In an annual survey of UK opinion, fewer than a fifth of people
identify the governments of rich countries as making a major contribution to the
reduction of international poverty, compared with two thirds who think that
international charities do so.92 This remains a precarious basis for DFID’s longterm survival and weight within Government.
8. Lessons from the UK experience
This final section contains some personal reflections on the main components of the
reforms, which I see as having been largely successful.
8.1 What were the components of success?
The main ingredients in the successful reform of UK development assistance have been:
•
Combining responsibility for all aid in a single Government department.
This has been the case in the UK since 1964 and has made an important
contribution to both the coherence and cost-effectiveness of British aid that other
countries would do well to emulate.
•
The establishment of an integrated development ministry, with influence over a
range of government policies that affect development, has had a significant effect
on the conduct of policy. While development interests will not always take
precedence over other government objectives, they should at least be identified
and taken into account in the design and execution of broader government
objectives.
•
Setting a clear purpose and focus on outcomes. DFID has been able to resist
short-term political pressures from changing its long-term strategy. This is easier
said than done: it requires powerful political leadership to prevent aid budgets
being diverted to other priorities. The appointment of a separate Cabinet
Minister, and legislation about the use to which aid resources could be put, has
enabled the department to resist other pressures.
•
Building an understanding among policy-makers and commentators of the
relationship between long-term interests and short-term interests of the
country.
•
Recognising that development is impossible without security; and security is
impossible without development. This mutual interdependence has profound
implications for Government institutions and priorities.
29
•
Acceptance that more can be achieved through partnerships with others, and
through leverage of the multilateral system, even if this means a less distinctive
high profile for the development program. This includes integrated management
of bilateral and multilateral aid to secure the synergies and ensure coherence.
8.2 How did it happen?
As with most successful revolutions, the changes succeeded in part because they found
resonance in a long evolution of thinking, and in part because they captured a the mood of
the moment. The unified management of aid by a single government department has been
a long-standing virtue of the UK system, dating back to 1964, which has been unusual
internationally. The UK has also consistently argued over many years the importance of
assistance to the poorest countries, although its own aid program did not always reflect
that priority. Many of the changes that the UK introduced in 1997 and afterwards were in
line with a new international mood that while increases in aid were an important part of
the development agenda, it was essential also to pay attention to the broader set of
policies that affect developing countries.
Other elements that enabled these changes to happen and to be sustained were:
•
High profile political leadership for a new approach to development. The Prime
Minister and Chancellor of the Exchequer were willing to back the new
Department, and Clare Short provided a strong focus for it. One external
commentator wrote: “What drove the difference? In a word, leadership. Short
imposed focus and drive on her organizations. She believed that DFID should –
and could – make a real difference. She recruited the best and the brightest from
the UK and abroad. She encouraged discussion and debate. She demanded
excellence.”93 Subsequent Cabinet Ministers have ensured that DFID retains a
high political profile.
•
A supportive political environment for improvements in the use of aid,
buttressed by investment in public education and development awareness
campaigns.
•
A supportive environment within the rest of government, including a recognition
that reorganising responsibilities and powers between government agencies is not
a zero sum game. British government departments learned that they could be
more effective and influential if they worked together to deliver coherent policy
objectives than if they spent their time and resources fighting for turf. Other
government departments were persuaded that they had something to gain from the
emergence of a strong, confident agency with responsibility for development
assistance.
Owen Barder
Center for Global Development
October 5, 2005
30
Appendix 1: The Pergau Dam
The Pergau Dam is a hydroelectric dam in Malaysia, near the border with Thailand. The
dam is the largest aid project ever financed by the United Kingdom.
In March 1988, the then Defence Secretary, Sir George Younger, signed a “defence
export Protocol” with Malaysia which committed the UK government to “bring to bear
the resources of its MOD [Ministry of Defence] in order to grant certain facilities,
including: - aid in support of non-military aspects under the programme.” Lord Younger
agreed that Malaysia would receive 20 per cent of the value of the arms sales in the form
of aid.
In November 1988 an application for aid through the ATP for the Pergau dam was made
to the Department of Trade and Industry (DTI) by a consortium of British companies, led
by Balfour Beatty, which had close connections to the governing Conservative Party. In
March 1989, the Malaysian Prime Minister, Dr Mahathir Mohamad, visited Downing
Street. The consortium and the British Government wanted to make an aid offer on the
dam during this visit. In order to meet this timetable, the ODA had to rush through a twoperson, two-day project appraisal and telephone an initial report on which Prime Minister,
Margaret Thatcher could make an oral offer of a £68.25 million grant, based on a contract
price of £316 million.
An offer of ATP assistance was made on the Pergau project in April 1989 (on the £316
million price) and renewed in October 1989 and April 1990 while commercial
negotiations continued. But in October 1990 it was not renewed, as the ODA and DTI had
sent a joint mission to survey the Malaysian power sector and the possibilities for other
projects which might attract British companies. That review concluded that completing
the Pergau project in 1997, as proposed, would mean a significant cost penalty for
Malaysian electricity consumers because electricity could be produced much more
cheaply by gas turbine power stations. By the time the contracts for the dam were signed
in July 1991, the price had risen to £417 million. Nevertheless, on a further visit to
London, in December 1990, Dr Mohamad confirmed that the Pergau project would go
ahead. Officials at the ODA and DTI continued to work on alternative power projects.
In February 1991, Sir Tim Lankester, the most senior civil servant in the ODA, formally
advised the Minister for Overseas Development that funding the Pergau Dam project
''would not be consistent with policy statements by ministers to Parliament about the
basic objectives of the aid programme''.
Ministers at the two departments responsible for the ATP program, Lynda Chalker and
Trade Minister, Tim Sainsbury, were opposed to providing support for the dam. But
others, including Britain's High Commissioner to Malaysia, Sir Nicholas Spreckley, and
Alan Clark, then Minister for Defence Procurement, argued that to withdraw support for
Pergau “would have an adverse impact on UK relations with Malaysia in general and on
the defence sales relationship in particular”. The Prime Minister, John Major, agreed with
their assessment. In July 1991, the then Foreign Secretary, Douglas Hurd, overruled the
objections and authorised expenditure from the aid budget of £234 million (about $400
million).
31
Once the aid offer had been made, the cost to the ODA more than doubled because the
ATP budget of about £100 million per year could not fund the £70 million for Pergau's
second year without crowding out other ATP projects. So, instead of £108 million in
grants over five years, the project was financed by a 14-year, very low-interest loan, at a
cost of £234 million.
At the time, officials denied any link between British aid and arms sales to Malaysia. The
Prime Minister’s office described the timing of the arms sales as “merely a coincidence”.
In January 1994 Sir Tim Lankester gave evidence to a House of Commons Public
Accounts Committee enquiry, and it was clear that there had in fact been a link between
the decision to give aid and the arms sales. As a result of this evidence, Douglas Hurd
admitted that there had been a “brief entanglement” between aid and arms sales from
March to June 1988. He claimed that this had been ended by Sir George Younger's letter
of 28 June 1988 to the Malaysian Finance Minister saying that “the linking of aid to
projects” would not be possible. On the same day, the British High Commissioner in
Kuala Lumpur also wrote to the Finance Minister, offering up to £200 million in ATP and
export credit support for future contracts. This amount was the same as the aid expected
to accompany the £1 billion of arms sales.
A judicial review brought by an NGO led to a High Court ruling in November 1994 that
aid for Pergau was in violation of the Overseas Development Act 1980, which allows the
Foreign Secretary to make payments “for the purpose of promoting the development or
maintaining the economy of a country or territory outside the UK or the welfare of its
people.”. The High Court ruled that the project was not of economic or humanitarian
benefit to the Malaysian people.
Following the ruling, the Foreign Secretary announced that the Government would meet
its contractual obligation to pay for the three-quarters-built dam. On 13 December 1994
he told the House of Commons that he would not appeal against the Court ruling, but the
ODA would not be reimbursed for the £24.37 million unlawfully spent on the Pergau
project between July 1991 and March 1994.
Sources:
Memoirs, Douglas Hurd (2003)
The Association for International Water and Forest Studies (FIVAS)
(http://www.fivas.org/rettsskr/pergau7.htm)
House of Commons Report (Hansard), 13 December 1994, Cols 773-774
http://www.publications.parliament.uk/pa/cm199495/cmhansrd/1994-12-13/Debate-1.html
32
Notes
1
The author worked at the Department for International Development from 2000-2004. He is currently
on unpaid leave while working at the Center for Global Development in Washington DC.
2
House of Commons Official Report (Hansard) 7 March 2001, Column 294
http://www.publications.parliament.uk/pa/cm200001/cmhansrd/vo010307/debtext/10307-04.htm
3
Cabinet Ministers are at the top of the three rungs on the ministerial ladder. Ministers immediately
below Cabinet rank are “Ministers of State”; below which there may be one or more “Parliamentary
Under-Secretaries of State”. Ministers below Cabinet rank are collectively known as “junior ministers”.
Junior ministers usually report to a Cabinet Minister. All ministers are in effect appointed by the Prime
Minister, and are usually, but not always, members of the House of Commons or the House of Lords.
Ministers in charge of large government departments are usually Cabinet Ministers; there are also other
members of the Cabinet – such as the Chief Whip and the Leader of the House of Commons – who do
not run government departments. The Treasury has two Cabinet Ministers (the Chancellor of the
Exchequer and the Chief Secretary). The designation “Secretary of State” dates back to before the
establishment of Cabinet government. It originally meant a minister to whom some of the functions of
the monarch were delegated, specifically related to the functioning of the Privy Council. Today the
title “Secretary of State” is generally given to ministers in charge of departments (although not, for
much of the twentieth century, the Minister for Agriculture), and the term is used almost
interchangeably with “Cabinet Minister”. The designation Secretary of State does not denote seniority
within Government, as some very senior members of the Cabinet are not Secretaries of State – such as
the Prime Minister, the Chancellor of the Exchequer and, until recently, the Lord Chancellor.
4
Robert Greenhill, Making a Difference: External Views on Canada’s International Impact – the
interim report of the Global Voices Project. January 2005
http://www.ciia.org/XVoices_Int_Report.pdf
5
The Economist, Aid Policy, October 31st 2002
6
The Colonial Development Act 1929 was passed by a minority Labour Government in 1929. Baron
Passfield – the former Sidney Webb – was Secretary for the Colonies and for Dominion Affairs when it
was passed.
7
“Planning” was a buzz-word in the UK immediately after the Second World War.
8
Memoirs of the Earl of Listowel, Minister of State for the Colonies: 1948-1950
http://www.redrice.com/listowel/index.html
9
A speech given by United States Secretary of State, George C. Marshall at Harvard University on 5
June 1947 initiated the post-war European Aid Program, more commonly known as the Marshall Plan.
http://www.oecd.org/document/10/0,2340,en_2649_201185_1876938_1_1_1_1,00.html
10
For example, see the inaugural address of President Harry S. Truman on January 20, 1949:
Almost a year ago, in company with 16 free nations of Europe, we launched the greatest cooperative
economic program in history. … Our efforts have brought new hope to all mankind. … We are moving
on with other nations to build an even stronger structure of international order and justice. …. More
than half the people of the world are living in conditions approaching misery. … For the first time in
history, humanity possesses the knowledge and the skill to relieve the suffering of these people. … With
the cooperation of business, private capital, agriculture, and labor in this country, this program can
33
greatly increase the industrial activity in other nations and can raise substantially their standards of
living. (http://www.bartleby.com/124/pres53.html)
11
John Bledsoe Bonds Bipartisan Strategy: Selling the Marshall Plan. By. (Westport: Praeger, 2002)
12
Helmut Führer, The Story Of Official Development Assistance A History Of The Development
Assistance Committee And The Development Co-Operation Directorate In Dates, Names And Figures
(Paris 1996). http://www.oecd.org/dataoecd/3/39/1896816.pdf
13
H M Treasury Assistance from the United Kingdom for Overseas Development. Cmnd.974.
(London: HMSO, March 1960).
14
H M Treasury, Aid to developing countries, Cmnd.2147. (London: HMSO. September 1963).
15
See Adrian Hewitt, (1978). British Aid: policy and practice, ODI Review, 2, 51-66.
16
Barbara Castle (October 18, 1964 - December 23, 1965), Anthony Greenwood (December 23, 1965 August 11, 1966) and Arthur Bottomley (August 11, 1966 - August 29, 1967) were members of the
Cabinet. Subsequent Ministers of Overseas Development under this administration, Reg Prentice
(August 1967 – October 1969) and Judith Hart (October 1969 – June 1970) were not members of the
Cabinet, though the ODM remained a separate department, independent of the Foreign &
Commonwealth Office.
17
Ministry of Overseas Development (1965) Overseas Development: the Work of the New Ministry.
London: HMSO.
18
Ministry of Overseas Development (1967) Overseas development: the work in hand. London:
HMSO.
19
Technically called the Foreign and Commonwealth Office (FCO) from October 1968. Referred to as
the Foreign Office throughout this paper for convenience.
20
See footnote 3 for an explanation of ministerial ranks
21
1975 White Paper, quoted in Adrian Hewitt, (1978). British Aid: policy and practice, ODI Review,
2, 51-66
22
The Foreign Secretary formally became Minister of Overseas Development, and hence exercised the
powers invested in that office by Parliament; while the junior Foreign Office Minister with day-to-day
responsibility for ODA was given the courtesy title of Minister for Overseas Development. Reginald
Prentice, who became Minister for Overseas Development from June 1975 until his resignation in
December 1976, was a member of the Cabinet. His successors, Frank Judd and Judith Hart, were not,
and the Foreign Secretary spoke on development issues in Cabinet on their behalf.
23
French support for the export of railway equipment to Kenya was the case that eventually led the
British Government to adopt its own program of concessionary export credits.
24
Judith Hart was regarded as having an agenda to the left of the party, and there were tense relations
with the Foreign Secretary, David Owen. Her successor, Reginald Prentice, sat in the Cabinet, but he
was becoming increasingly disaffected by the political direction of the Labour Party, from which he
resigned when his constituency party de-selected him. His successor, Frank Judd, who was not a
member of the Cabinet, held the post for only a few months before moving to the Foreign Office.
34
25
Mitchell, John (1991), “Public campaigning on overseas aid in the 1980s,” Britain’s overseas aid
since 1979: Between idealism and self-interest, Eds. Anuradha Bose and Peter Burnell, Manchester
University Press, Manchester. P 146.
26
Hansard, 20 February 1980 Cols 464-465. The full text of statement is reproduced at:
http://www.owen.org/musings/marten.php
27
Adrian Hewitt, (2001) Beyond poverty? The new UK policy on international development and
globalization Third World Quarterly, Vol 22, No 2, pp 291–296, 2001
28
Tony Killick, “Understanding British aid to Africa: an historical perspective”,
http://www.odi.org.uk/RAPID/Projects/RAP0011/docs/Annex2_Killick.pdf
29
The “Lawson Doctrine” is often known in the UK as the “Burns Doctrine”, after Terry Burns, later
Lord Burns, then the Chief Economic Adviser at the Treasury.
30
The Times, London, June 7 1990
31
Douglas Hurd, “Memoirs”, Little Brown, 1993. Lynda Chalker was the Minister for Overseas
Development from July 1989 to May 1997, and Minister for Africa.
32
Labour Party Manifesto, 1997. Also see Tony Blair interviewed on the Dimbleby Programme, April
7 1997.
http://www.bbc.co.uk/election97/background/parties/panblair2.htm
33
Vernon Bogdanor, Joined Up Government (Oxford University Press, 2005)
34
The background of the Pergau Dam decision is described in Appendix 1. Labour’s foreign affairs
spokesman, Robin Cook, called the verdict “an alarming glimpse into the private arrogance of a
Government who have been there for so long that they no longer even ask whether there are limits to
their personal authority” – House of Commons Report (Hansard), 17 November 1994, Col 150.
35
John Kampfner, “Blair’s Wars”, (London: Free Press, 2004), p. 7.
36
Speech by Robin Cook, 12 May 1997, announcing the new Foreign Office “mission statement”.
http://www.guardian.co.uk/indonesia/Story/0,2763,190889,00.html
37
Willy Brandt , “North-South: A programme for survival : Report of the Independent Commission on
International Development Issues” (Pan Books, 1980)
38
Independent Group on British Aid , “Real Aid: a Strategy for Britain”, (1982)
39
Randel, J. and German, T., The Reality of Aid, (1993) London: ActionAid, ICVA and EUROSTEP.
Reality of Aid reports also published in 1997, 1998, 2000, 2002, 2004.
40
Jim Michel, The birth of the MDGs, DAC News, Sept-Oct 2005.
http://www.oecd.org/document/34/0,2340,en_2649_33721_35295778_1_1_1_1,00.html
41
OECD Development Assistance Committee, Shaping the 21st Century (Paris 1996).
http://www.oecd.org/dataoecd/23/35/2508761.pdf
42
United Nations Millennium Declaration, UN A/RES/55/2, 18 September 2000.
http://www.undp.org/mdg/99-Millennium_Declaration_and_Follow_up_Resolution.pdf
35
43
Clare Short (2004) An Honourable Deception? New Labour, Iraq and the misuse of power. London:
Free Press. P51.
44
Sir John Vereker, ‘Blazing the trail: eight years of change in handling international development’,
Development Policy Review 20: 2, 2002.
45
John Kampfner, “Blair’s Wars”, (London: Free Press, 2004), p. 64.
46
The ODA Permanent Secretary, Sir John Vereker, had been a member of the committee which drew
up Shaping the 21st Century in 1996.
http://www.oecd.org/dataoecd/23/35/2508761.pdf
47
Department for International Development (1997) Eliminating world poverty: a challenge for the
21st century, Cm. 3789. London: The Stationery Office.
http://www.dfid.gov.uk/pubs/files/whitepaper1997.pdf
48
Department for International Development (2000) Eliminating World Poverty: Making Globalization
Work for the Poor. Cm. 5006. London: The Stationery Office.
http://www.dfid.gov.uk/pubs/files/whitepaper2000.pdf
49
The International Development Targets were set out in Shaping the 21st Century (Paris: OECD.
1996) http://www.oecd.org/dataoecd/23/35/2508761.pdf
50
Between 50,000 and 100,000 people demonstrated at the World Trade Organisation Ministerial
Meeting in Seattle in December 1999
51
Department for International Development (2004) The Africa Conflict Prevention Pool: An
Information Document. London: DFID.
http://www.dfid.gov.uk/pubs/files/acppinfodoc.pdf
52
Hansard Written Answers 12 Mar 2004 : Column 1792W
http://www.publications.parliament.uk/pa/cm200304/cmhansrd/vo040312/text/40312w12.htm#40312w
12.html_wqn5
53
Austin et al., Evaluation. of Conflict Prevention Pools (London: DFID, 2004)
http://www.fco.gov.uk/Files/kfile/ev647s.pdf
54
The full act is at http://www.legislation.hmso.gov.uk/acts/acts2002/20020001.htm
55
The research included:
- Burnside, C. and Dollar, D. (1997), Aid, Policies, and Growth, Policy Research Working Paper 1777,
Development Research Group, World Bank, Washington, DC, June
- Collier, P. and Dollar, D. (1999), Aid Allocation and Poverty Reduction, Policy Research Working
Paper 2041, Development Research Group, World Bank, Washington, DC, January.
- Collier, P. and Dollar, D. (1999b), ’Aid Allocation and Poverty Reduction’, Development Research
Group, World Bank, Washington, DC, 11th April, mimeo.
56
Department for International Development: “E U Institutional Strategy Paper”, December 1998.
57
Her Majesty’s Treasury (H M Treasury) is the name for the UK Finance Ministry, which combines
the functions of an economic ministry and a budget ministry. The Finance Minister is known as the
Chancellor of the Exchequer.
36
58
Department for International Development, July 2002 Public Service Agreement.
http://www.dfid.gov.uk/pubs/files/publicserviceagreement03-06.pdf
59
Dyer, N., J. Beynon, M. Butler, S. De, P. Landymore, C. Porter, S. Richards, M. Smart, M. Speight
and R. Turner (2003), Strategic Review of Resource Allocation Priorities, Department for International
Development Discussion Paper, London, January 2003.
http://www.dfid.gov.uk/pubs/files/resourceallocation.pdf
60
Department for International Development (2005) Fighting Poverty to build a sustainable world.
London: DFID.
http://www.dfid.gov.uk/pubs/files/securityforall.pdf
61
Department for International Development (2004) 2005-2008 Middle Income Country Strategy.
London: DFID.
http://www.dfid.gov.uk/pubs/files/achievingmdgmidincome.pdf
62
Tom Porteous (2005) British Government Policy in sub-Saharan Africa under New Labour.
International Affairs 81, 2 (2005) 281-297. Clare Short (2004) An Honourable Deception? New
Labour, Iraq and the misuse of power. London: Free Press. pp78-80.
63
Clare Short (2004) An Honourable Deception? New Labour, Iraq and the misuse of power. London:
Free Press. P79.
64
Tom Porteous (2005) British Government Policy in sub-Saharan Africa under New Labour.
International Affairs 81, 2 (2005) 281-297.
65
Unlike other bilateral donors, DFID offices in country were separate from the local British Embassy,
and the staff reported directly to DFID Ministers in London.
66
Department for International Development Annual Report 2005. Chapter 7, pp150-1.
http://www.dfid.gov.uk/pubs/files/departmental-report/2005/CHAP-07.pdf
67
Clare Short (2004) An Honourable Deception? New Labour, Iraq and the misuse of power. London:
Free Press. P78.
68
Making globalisation a force for good, Cm 6278, (2004). The Stationery Office, London.
http://www.dti.gov.uk/ewt/whitepaper.htm
69
Sir John Vereker, ‘Blazing the trail: eight years of change in handling international development’,
Development Policy Review 20: 2, 2002.
70
Seamus Milne “Blair's secret plan to crack down on asylum seekers”, The Guardian, 23 May 2002.
http://www.guardian.co.uk/uk_news/story/0,3604,720608,00.html
71
Clare Short (2004) An Honourable Deception? New Labour, Iraq and the misuse of power. London:
Free Press. P130-131.
72
Clare Short (2004) An Honourable Deception? New Labour, Iraq and the misuse of power. London:
Free Press. P134.
73
Reported on BBC News website, Friday, 24 May, 2002.
http://news.bbc.co.uk/1/hi/uk_politics/2005605.stm
37
74
John Vereker, ‘Blazing the trail: eight years of change in handling international development’,
Development Policy Review 20: 2, 2002; p135.
75
“Each economically advanced country will progressively increase its official development assistance
to the developing countries and will exert its best efforts to reach a minimum net amount of 0.7 per
cent of its gross national product … by the middle of the Decade” UN General Assembly resolution
2626 (XXV), paragraph 43, November 19, 1970.
76
For an account of the history of the 0.7% target and a discussion of its rationale as an international
goal, see Michael A. Clemens and Todd J. Moss, Ghost of 0.7%: Origins and Relevance of the
International Aid Target – Center for Global Development Working Paper 68
http://www.cgdev.org/content/publications/detail/3822/
77
OECD Donor Assistance Committee, United Kingdom Peer Review, 2001
http://www.oecd.org/document/33/0,2340,en_2649_34603_2460513_1_1_1_1,00.html
78
H M Treasury Press Notice, 12 July 2004.
http://www.hm-treasury.gov.uk/spending_review/spend_sr04/press/spend_sr04_press09.cfm
79
Sources: Department for International Development, Statistics on International Development,
(2004). H M Treasury Press Notice, 12 July 2004.
80
H M Treasury (2002) Spending Review 2002
http://www.archive2.official-documents.co.uk/document/cm55/5570/5570-05.htm
81
Dyer, N., J. Beynon, M. Butler, S. De, P. Landymore, C. Porter, S. Richards, M. Smart, M. Speight
and R. Turner (2003), Strategic Review of Resource Allocation Priorities, Department for International
Development Discussion Paper, London, January 2003. P15.
http://www.dfid.gov.uk/pubs/files/resourceallocation.pdf
82
Department for International Development (2004), Drivers of Change
http://www.grc-exchange.org/docs/doc59.pdf
83
Department for International Development, Statistics on International Development, (2004).
Table 2.2 http://www.dfid.gov.uk/pubs/files/sid2004/sid2004-table2-2.pdf
84
See OECD Donors Assistance Committee (2004) Development Cooperation Report
http://www.oecd.org/document/26/0,2340,en_2649_34447_34405978_1_1_1_1,00.html
85
Available online at http://aida.developmentgateway.org/AidaHome.do
86
See http://www.roughguide-betterworld.com/ for an online version
87
Office of National Statistics (2004) Public Attitudes Towards Development.
http://www.dfid.gov.uk/pubs/files/omnibus2004.pdf
88
Clare Short (2004) An Honourable Deception? New Labour, Iraq and the misuse of power. London:
Free Press. P81.
89
See case studies on DFID website at:
http://www.dfid.gov.uk/news/files/pressreleases/increase-ngo-support.asp
38
90
Foreign Policy , September/October 2005 pp 76-83. Available at:
http://www.cgdev.org/section/initiatives/_active/cdi
91
An example of DFID’s success in retaining a focus on poverty is the decision to preserve the 90-10
rule in the face of rising costs in post-war Iraq
92
Maureen O’Brien, Office of National Statistics, “Public attitudes for development (Knowledge and
attitudes concerning poverty in developing countries)”. Based on data from the National Statistics
Omnibus Survey for The Department for International Development, July 2004.
http://www.dfid.gov.uk/pubs/files/omnibus2004.pdf
93
It should be noted that this view comes from a report based on interviews with several dozen world
leaders, who have a tendency to ascribe most successful changes to leadership above all else.
Robert Greenhill, Making a Difference: External Views on Canada’s International Impact – the interim
report of the Global Voices Project. January 2005
http://www.ciia.org/XVoices_Int_Report.pdf
39